Many businesses already have their tax and financials up to date with their quarterly Business Activity Statements (BAS). However, the end of June not only signifies your last BAS for the 2018 financial year, but it also means that you have a number of other tax related tasks that need to be completed, before the end of the financial year (EOFY).
Whilst your accountant most probably has all of this in hand, it always pays to know what needs to be completed. This is because at the end of the day, it is the responsibility of the business owner to ensure that all the financials and tax requirements have been met.
In addition to this, a healthy ongoing commitment to regularly updating your business financials throughout the year is a wise move, as it helps you keep a comparative eye on your budget compared to the previous ‘year to date’ figures, i.e. changes to turnover, expenses, wages, profitability and cash flow;
- Tax forms: It goes without saying that you need to complete an EOFY tax lodgment form. Whether you complete this yourself or your accountant has the honor, you will need evidence of all accounts paid and still owing, as well as all receipts and a balance sheet or ledger, and of course the results of your stock take, if applicable. In fact you will need all of your financial information up to date, so that your accounts can be reconciled at the end of the financial year.
- BAS: You need to complete your last quarterly BAS for 2018 and lodge it by its due date. You can do all of this at the same time as you reconcile your accounts and lodge your EOFY tax.
- PAYG: If you have employees, you will need to give them their EOFY payment summaries and at the same time, reconcile your payroll. Your employees cannot lodge their own EOFY tax forms until they receive their payment summaries from your business.
- ASIC reports: You only need to complete these annual reports if you are registered as a company in Australia and only if certain requirements are met. In these instances, it is usually best to engage an accountant, who has the appropriate experience to complete these reports correctly.
- FBT: This won’t apply to every business, but if your financials include fringe benefits to your employees, then you need to lodge your fringe benefits tax at this time. Again, your accountant can do this for you.
Once more, in addition to these regulatory EOFY business tax requirements, there are also other tasks that you can perform to prepare for the 2018 financial tax year.
- Review your accounting software: Along with your accountant, ensure that you are using the best accounting software for your business and investigate whether moving to a cloud based application is suitable for you. Doing your bookkeeping yourself or employing a bookkeeper to do it for you by using one of the modern accounting software packages today can save you time and money, and a larger than necessary accountant bill at the end of the year. Most of these modern packages can generate a range of management reports, and monthly profit and loss statements, which is a must for small business owners today.
- Review stock balances: Any old or slow moving stock can be sold at discount prices or written off in your 2018 tax accounts. It is then essential that you review your purchasing policies regularly to ensure that you don’t end up with too much old stock. Old stock or too much stock can is always a problem in a business sale or valuation later on.
- Review slow payers: A business that is always slow to pay their invoices should be contacted before the end of the financial year to encourage prompt payment. Your options to resolve this type of predicament are to renegotiate your trading terms with them or refer them to a debt collection agency.
- Review fixed assets: A yearly review of your equipment and fixed assets before the EOFY will identify items that need to be replaced, sold or written off. If you perform these reviews early enough in the year, these can be included in your 2018 tax financials.
- Review financial goals: Perform a review of your financial goals for 2018 and reset new targets for the 2019 financial year.
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